Return on Equity Ratio
McDonald’s has held a high return on equity for the last four years. They reached a high of 38.24 percent for the year of 2011 while the industry fell below at only 15.40 percent. This demonstrates their ability to generate cash internally. Although the company decreased its Return on equity for the year of 2012 to 35.73 percent, it seems as though the industry increased their Return on Equity to 16.70 percent. Like their ROA, McDonald’s ROE started a deteriorating trend from 2011 to 2012 and from 2012 to 2013. And the Industry ROE is showing a steadily increasing trend. There is a substantial difference because of the amount of net income McDonald’s have. The corporation is able to generate a substantial amount of cash internally, which is why they are higher than the industry and it puts them in a better position in comparison to their competitions.
Business Level Strategy
After carefully analyzing McDonald’s strength and weaknesses, it seems apparent that the company is best suited to pursue a differentiated business model. However, the company’s external threats and opportunities paint a different picture. The company’s growing marketing budget has allowed the company to build a global brand that distinguishes it from its competitors. On the same note, the company’s information systems and careful infrastructure create the foundation through which their supply chain can operate at maximum efficiency. Thus, allowing the company to carefully monitor their costs so they can spread the cost savings to their customers. This is why McDonald’s business model is an integrated strategy that takes advantage of each scenario’s offerings through intelligent and often risky decisions that complement their objec...
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This requirement makes it important to look through a majority of the return ratios, which include return on sales, return on assets, and return on equity. Additionally, investors are also interested in the ratios related to the company’s earnings, such as earnings per share (EPS) and PE ratio. Looking at return on sales, we can see that Wendy’s has a 7.27% return on sales and Bob Evans has a 1.23%, which demonstrates Wendy’s has a higher profit margin. Moreover, Wendys’ return on assets is 2.85% and Bob Evans is 1.58%. Also, Wendy’s and Bob Evan 's have return on equity ratios of 6.66% and 4.30%, respectively. All of these return ratios show that Wendy’s has a better handle on turning working capital into revenue. On the other hand, although Wendy’s return ratios are higher than Bob Evans, Bob Evans has a better performance on earnings per share and PE ratio. This is due to Bob Evans having less common stock share outstanding, which makes their earnings per share and PE ratio higher than Wendy’s. Due to the EPS being higher for Bob Evans, we would recommend that investors look towards Bob
Schlosser, Eric. Fast Food Nation: The Dark Side of the All-American Meal. Boston: Houghton Mifflin, 2001. Print.
“They’ve done it before and they did it tonight and they’ll do it again and when they do it-seems that only the children weep.” (Lee-285) Ideas have not been engraved in children’s heads which allows them to see the world as a bright, confusing place. I chose Scout as the character for my memory box because she tells “To kill A Mockingbird” with a sweet child’s view. She does not understand why there are prejudices and why some people are treated different than others. School, Atticus, and the courtroom taught Scout many lessons that she will never forget. The memory box itself is Mrs.Dubose’s candy box that she had given to Jem. For readers to see the book in an innocent, childish way during the 1930’s must have changed the way many people felt about how the country treated African Americans. Harper Lee made a very wise decision to tell this amazing story through the eyes of a child.
The corporation I chose to discuss is McDonald’s. McDonald’s is a publicly traded corporation that includes the following domestic companies, McDonald’s, Chipotle Mexican Grill, and Boston Market. This paper will discuss the following:
Another thing that stood out was they way these fast food places treat their workers. Their policy of automation has created a whole group of people that do not have to think to do their job. These people – usually teenagers – are paid minimum wage to push buttons and do all of the jobs that used to be done by hand. It gains governm...
From a study completed by Chicago-based Research International USA completed a study called “Fast Food Nation 2008. The panel consisted of 1,000 respondents of ages 16-65 who provided their inputs with an online survey which was conducted between March 13 through 2008. Which was based on results on fast food restaurants like McDonald’s, Burger King, and Wendy’s are gaining popularity even through the economic hardship and recession. Marketing strategy has become more of influence on kids and young American’s. As population grows and the demand increases of fast food restaurants are expanding their stores to capturing more consumers. Fast food chains are also willing to change their menus to continue to gain and retain repeating customers. With each generation that passes, brings fast food chains into more homes and continues impacting lives.
When working at a fast food restaurant, more often than not it is accompanied with a stigma. People tend to believe that those who work in fast food restaurants are not capable of anything better. They assume people working at fast food restaurants are slow and uneducated, or they simply look down upon them because these jobs have become known as "dead-end jobs." This so-called "dead-end job" is what people might describe as low-wage labor that employees have a susceptibility to become trapped in. Fast food employee’s face many challenges, morally and socially.
In the book Fast Food Nation: The Darks Side of the All-American Meal, Eric Schlosser claims that fast food impacts more than our eating habits, it impacts “…our economy, our culture, and our values”(3) . At the heart of Schlosser’s argument is that the entrepreneurial spirit —defined by hard work, innovation, and taking extraordinary risks— has nothing to do with the rise of the fast food empire and all its subsidiaries. In reality, the success of a fast food restaurant is contingent upon obtaining taxpayer money, avoiding government restraints, and indoctrinating its target audience from as young as possible. The resulting affordable, good-tasting, nostalgic, and addictive foods make it difficult to be reasonable about food choices, specifically in a fast food industry chiefly built by greedy executives.
Schlosser, Eric. Fast Food Nation: The Dark Side of the All-American Meal. Boston: Houghton Mifflin, 2001. Print.
Identification: Three aspects of McDonald’s overarching strategy are that they have focused heavily on emerging markets, began offering a wider variety of food to attract more sectors, and that they have not been afraid to take on new competitors. These three aspects are related in that when McDonald’s expands to different regions and markets, they are forced to battle new competitors to maintain dominance. Although McDonald’s already seems massively widespread, they still have not fully immersed the world entirely. Over the last several years, McDonald’s has made extensive effort towards developing in emerging markets. They have expanded throughout China and India, and also more unexpected areas such as certain African nations. In 2012, sales
For millions, fast food restaurants are the source of positive associations with birthday parties, play dates and accessible comfort food. For others, they represent a lifeline meal on a busy day, or the secret to quieting a cranky toddler on a long trip because hurrying residents of cities have no time to cook a healthy breakfast, lunch and dinner. Fast food presents even in the lives of people who are trying
Analyse McDonalds using a well known model to assess the competitive position that it occupies within its industry
The purpose of this project is to know how operations management contributes to the competitive advantage of McDonald's. In this project I have also discussed the theoretical stand point of inventory, capacity management, lean synchronization and quality management and how they impacted on the organization. For this purpose I have selected McDonalds to obtain necessary data and its analysis.
Schlosser, Eric. Fast Food Nation: The Dark Side of the All-American Meal. Boston: Houghton Mifflin, 2001. N. pag. Print.
Top level management includes Jim Skinner, the concepts of the late Charles Bell, and the late James Cantalupo. James Cantalupo was a former vice-chairman who had overseen McDonald's successful international expansion in the 1980's and 1990's. He came out of retirement and took over as CEO in hopes of quashing the potential downfall McDonald's was facing. He was instrumental in developing a strategic plan called "Plan to Win" which was the starting point for the turnaround at the beginning of 2003. This Plan contains aggressive goals and measures for success based on the critical drivers of customer experience or the 5 P's: People, Products, Price, Place and Promotion. (Chief Executive, Salad Days) Today sales are strong in domestic markets and even higher in the global markets. The plan focuses on existing customers and by changing their image to promote healtheir